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Money Laundering Solicitors

Money Laundering is defined as ‘The process by which the proceeds of crime are converted into assets which appear to have a legitimate origin so that they can be retained permanently or recycled into further criminal enterprises’.

Money laundering schemes can be very simple or highly sophisticated. Most sophisticated money laundering schemes involve three stages:

– Placement – the process of getting criminal money into the financial system;

– Layering – the process of moving money in the financial system through complex webs of transactions, often via offshore companies;

– Integration – the process by which criminal money ultimately becomes absorbed into the economy, such as through investment in real estate.

There are three principal money laundering offences under the Proceeds of Crime Act 2002 (POCA) –

(e) removes criminal property from England and Wales or from Scotland or from Northern Ireland.

(2) But a person does not commit such an offence if —

(a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent;

(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;

(c) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.

(3) Concealing or disguising criminal property includes concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it.

This would include, for example paying cash into a bank account, or transferring it from one account to another.

The prosecution have to prove –

– the act of concealing, disguising etc;

– in relation to property;

– which was a benefit from criminal conduct; and

– that the defendant knew or suspected that the property represented a benefit from criminal conduct.

Arrangements- s328 POCA 2002

(1) A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.

(2) But a person does not commit such an offence if —

(a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent;

(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;

(c) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.

The prosecution has to prove that:

– the defendant enters into or becomes concerned in an arrangement;

– which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control;

-of criminal property;

– by or on behalf of another person.

Acquisition, use and possession – s329 POCA

(1) A person commits an offence if he —

(a) acquires criminal property;

(b) uses criminal property;

(c) has possession of criminal property.

(2) But a person does not commit such an offence if —

(a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent;

(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;

(c) he acquired or used or had possession of the property for adequate consideration;

(d) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.

(3) For the purposes of this section —

(a) a person acquires property for inadequate consideration if the value of the consideration is significantly less than the value of the property;

(b) a person uses or has possession of property for inadequate consideration if the value of the consideration is significantly less than the value of the use or possession;

(c) the provision by a person of goods or services which he knows or suspects may help another to carry out criminal conduct is not consideration.

The prosecution has to prove:

– acquisition use or possession; – of property;

– which was the benefit of criminal conduct;

– and that the defendant had the necessary knowledge or suspicion that the property represented a benefit from criminal conduct.

Possession means having physical custody of criminal property.

There are a number of key principles in all of these offences.

Criminal Property

s340 POCA defines Criminal Property –

Property is criminal property if—

(a) it constitutes a person’s benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and

(b) the alleged offender knows or suspects that it constitutes or represents such a benefit.

Importantly here even if only part of the property comes from criminal conduct the whole property is treated as criminal property. It includes all sort of property such as money, real property and even intangible property.

The prosecution have to show that you knew or suspected that the property represented benefit from criminal activity. It does not have to be your criminal activity. Suspicion is subjective, it is what you thought. The CPS have to show that you thought that there was a possibility, which was more than fanciful, that the other person was or had been engaged in or had benefited from criminal conduct. It is not enough to say that you should have suspected.

Criminal Conduct

This can be conduct that is unlawful in any part of the United Kingdom, or conduct which it if took place in any part of the UK would be unlawful there. This means that it can include offences committed abroad if they are also offences here. So for example drug dealing in another country.

The prosecution do not have to prove the specific crime, it is enough to show that the property could only have come from criminal activity.

Proving the property came from Criminal Conduct

The prosecution will use various methods to prove that the property came from criminal conduct such as –

– Accomplice evidence;

– Circumstantial evidence and/or other evidence;

– Forensic evidence (e.g. contamination of cash with drugs) from which inferences can be drawn that money came from drug trafficking;

– Evidence of complex audit trails, from which an accountancy expert may be able to conclude that the complexity of the transactions indicate that the property was the proceeds of crime.

– Evidence of the unlikelihood of the property being of legitimate origin – Where the prosecution proves that the defendant has no legitimate explanation for possessing the property in question a jury may be willing to draw an inference that it is proceeds of crime;

– Criminals often attempt to launder proceeds through a cash intensive business. Where the cash flows appear too large or the profit margins too high this may be capable of giving rise to expert evidence that the business will usually give rise to a particular level of profit and the profits are clearly excessive which together with other available evidence can be sufficient to prove the underlying criminality.

Defences

An offence is not committed if a person makes an “authorised disclosure” under S.338 to a constable, a customs officer, or a nominated officer. The defence also applies to those who intended to make such a disclosure but had a reasonable excuse for not doing so.

It would also be a defence to show that you did not suspect that it came from criminal activity or that it did not in fact come from criminal activity.

In relation to an allegation under s329 it is a defence to show that you acquired, used or had possession of the property for “adequate consideration.” This would cover those cases where the funds or property have been acquired by a purchase for a proper market price or similar exchange and to cater for any injustice which might otherwise arise: for example, in the case of tradesmen who are paid for ordinary consumable goods and services in money that comes from crime.

This defence will also apply where professional advisors (such as solicitors or accountants) receive money for or on account of costs (whether from the client or from another person on the client’s behalf). This defence would not be available to a professional where the value of the work carried out or intended to be carried out on behalf of the client was significantly less than the money received for or on account of costs.

If a person pays proper consideration but it can be shown that he knows or suspects that such payment may help another to carry out criminal conduct he is not treated as having paid proper consideration.

Sentencing

The sentence that the court impose will depend on a number of factors, principally the amount of money involved. The prosecution will identify whether you had a leading or minor role in the offence. The court will also look at factors such as attempts to destroy or conceal evidence, blame wrongly placed on others, damage to innocent third parties including loss of employment. On the mitigation side they will take into account remorse, little or no prospect of success, sole or primary carer for dependent relatives and activity which was originally legitimate. Taking all of these into account the starting point even for a small amount such as £10,000 is a prison sentence.

How we can help

These cases are often very complex. It is important that the matter is looked into fully to see whether there are any defences. We have a strong team including very experienced barristers and forensic accountants who will make sure that no stone is left unturned. If there is no defence we will work towards building a strong mitigation. We can help in any court and can see people in Nottingham, Birmingham and London.